[US Stock Closing]A record week marked by a happy ending. The S&P 500 closed above 3000 for the first time.
The U.S. stock market rose to an all-time high on Friday, July 12, ending a record week.
The Dow Jones Industrial Average rose 243.95 points, or 0.9%, to 27332.03. The S&P 500 index rose 0.5% to 3013.77, closing above 3000 for the first time. The Nasdaq Composite Index rose 0.6% to 8244.14.
Federal Reserve Chairman Powell testified that interest rates would be cut soon. Major stock indexes passed milestones this week and recorded strong gains. The Dow Jones index closed above 27,000 for the first time on Thursday, and Friday,s rise pushed it up 1.5% this week. Meanwhile, the S& P 500 index rose 0.8% and the Nasdaq index closed up 1% this week.
On Friday, however, Wall Street was quiet, with SPDR S&P 500 ETF trading around 30 million shares, the lowest this year.
Michael Katz, partner of Seven Points Capital, said: "You can,t fight the Fed here. We have a strong bull market and we have a strong upward trend. As long as the stock market continues to rise, we must continue to buy at bargain prices, not against the market.
Intel and Caterpillar rose 2.7% and 3.3%, respectively. J.B. Hunt Transport Services was the best performing stock in the S&P 500 index, up 5.9% and leading the industrial sector by 1.8%.
Federal Reserve Chairman Powell testified in front of congressional leaders this week that weak overseas economic activity and intensified trade tensions are damaging the prospects of the U.S. economy.
"Powell boosted the market this week. Therefore, the S& P 500 index may be in the current range of 2500 - 3100, "said JJ Kinahan, chief market strategist at TD Ameritrade. But "I think the scope of our activities is limited until the tariffs are resolved."
According to the Federal Reserve,s observation tool of the Chicago Mercantile Exchange Group, the market is now expecting a rate cut of 100%. Traders also expect the Fed to cut interest rates by 20% by 50 basis points. The next step for the Federal Reserve is to set interest rates on July 31.
Despite some stronger-than-expected inflation data released this week, interest rate cuts are still expected to be high. The Labor Department said this week that last month the producer price index (PPI) and consumer price index (CPI) rose more than expected. Last week, the U.S. government announced that employment growth in June was stronger than expected.
"The Fed is on a one-way street to cut interest rates," said Art Hogan, chief market strategist at National Securities. "The market is clearly in a `non-confrontation with the Federal Reserve,model."
"In the coming weeks, we will turn our attention to something more fundamental: profitability," he said. In the earnings season, it,s never easy for stock prices to be at historic highs.
The corporate earnings season will kick off next week, with major banks such as J.P. Morgan Chase, Citigroup, Goldman Sachs and Bank of America releasing earnings next week. However, the market is pessimistic about the earnings season.
According to FactSet, analysts expect earnings of S&P 500 companies to fall by more than 2% in the second quarter.